First Loan Modification Agreement



 Exhibit 10.1 
 FIRST LOAN MODIFICATION AGREEMENT (DOMESTIC) 
 This
First Loan Modification Agreement (Domestic) (this “Loan Modification Agreement”) is entered into as of the First Loan Modification Effective Date (Domestic), by and between SILICON VALLEY BANK, a California corporation, with
its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 380 Interlocken Crescent, Suite 600, Broomfield, Colorado 80021(“Bank”), STEREOTAXIS, INC.,
a Delaware corporation (“Stereotaxis”), and STEREOTAXIS INTERNATIONAL, INC., a Delaware limited liability company, each with offices located at 4320 Forest Park Avenue, Suite 100, St. Louis, Missouri 63108
(“International”, and together with Stereotaxis, individually and collectively, jointly and severally, “Borrower”). 
 1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of March 11, 2009,
evidenced by, among other documents, a certain Loan and Security Agreement dated as of March 11, 2009 (as may be amended from time to time, the “Loan Agreement”) and a certain Export-Import Bank Loan and Security Agreement,
dated as of March 11, 2009 (as may be amended from time to time, the “EXIM Bank Loan and Security Agreement”), in each case between Borrower and Bank. Capitalized terms used but not otherwise defined herein shall have the same
meaning as in the Loan Agreement. 
 2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as described
in the Loan Agreement and the EXIM Bank Loan and Security Agreement (together with any other collateral security granted to Bank, the “Security Documents”). 
 Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”. 
 3. DESCRIPTION OF CHANGE IN TERMS. 
  

	 	A.	Modifications to Loan Agreement. 

  

	 	1	The Loan Agreement shall be amended by deleting the following text appearing as Section 6.9(a) thereof in its entirety: 

 “(a) Tangible Net Worth. Borrower shall maintain a minimum Tangible Net Worth of no less than (i) $1.00 for the monthly
periods ending February 28, 2009 and March 31, 2009; (ii) ($3,000,000) for the monthly periods ending April 30, 2009, May 31, 2009 and June 30, 2009; (iii) ($8,000,000) for the monthly periods ending
July 31, 2009 and August 31, 2009; (iv) ($6,500,000) for the monthly period ending September 30, 2009; (v) ($11,000,000) for the monthly periods ending October 31, 2009 and November 30, 2009; (vi) ($6,500,000)
for the monthly period ending December 31, 2009; (vii) ($12,000,000) for the monthly periods ending January 31, 2010 and February 28, 2010; and (viii) ($8,000,000) for the month ending March 31, 2010.” 

and inserting in lieu thereof the following: 
 “(a) Tangible Net Worth. Borrower shall maintain a minimum Tangible Net Worth of no less than (i) $1.00 for the monthly periods ending February 28, 2009 and March 31, 2009;
(ii) ($3,000,000) for the monthly periods ending April 30, 2009, May 31, 2009 and June 30, 2009; (iii) ($8,000,000) for the monthly periods ending July 31, 2009 and August 31, 2009; (iv) ($6,500,000) for
the monthly period ending September 30, 2009; (v) $3,903,001for the monthly periods ending October 31, 2009 through and including August 31, 2010; (vi) $1,903,000 for the monthly periods ending September 30, 2010
through and including the monthly period ending November 30, 2010; and (vii) ($97,000) for the monthly period ending December 31, 2010 and each monthly period thereafter provided further, than in the event that Guaranteed
Advances








 
are no longer available under the Guaranteed Line, the foregoing covenant levels shall be adjusted by Bank, in its good faith business judgment. Such Tangible Net Worth requirements set forth
above shall be increased by fifty percent (50%) of the net proceeds from issuances of equity securities of the Borrower and/or Subordinated Debt issued after the First Loan Modification Effective Date (Domestic).” 
  

	 	2	The Loan Agreement shall be amended by inserting the following new Section 7.11 immediately following Section 7.10 thereof: 

 “7.11 Mark-to-Market Warrant Expense. At any time, permit the aggregate mark-to-market expense required in accordance with GAAP,
with respect to any outstanding warrants of the Borrower and its Subsidiaries, to exceed Four Million Five Hundred Thousand Dollars ($4,500,000).” 
  

	 	3	The Loan Agreement shall be amended by adding the following definitions to Section 13.1 thereof, each in its appropriate alphabetical order:


 “First Loan Modification Effective Date (Domestic)” is December     ,
2009.” 
  

	 	4	The Loan Agreement shall be amended by deleting the following definitions from Section 13.1 thereof, each in its entirety: 

 ““Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the aggregate of
(X) the Borrowing Base plus (Y) the Guaranteed Line; minus (b) the amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit plus an amount equal to the Letter of Credit Reserves);
minus (c) the FX Reserve; minus (d) the outstanding principal balance of any Advances (including any amounts used for Cash Management Services); minus (e) the outstanding principal balance of any Guaranteed
Advances. The aggregate amount of all Credit Extensions (other than outstanding principal under the Equipment Line) under this Agreement outstanding at any time, together with all outstanding Advances (as defined in the EXIM Loan Agreement) under
the EXIM Loan Agreement outstanding at any time shall not exceed Twenty Five Million Dollars ($25,000,000). 
 “Revolving Line” is an Advance or Advances (including, without limitation, Guaranteed Advances and Advances made pursuant to the EXIM Loan Agreement) in an aggregate amount outstanding at any time under this Agreement and
the EXIM Loan Agreement of up to Twenty Five Million Dollars ($25,000,000). 
 “Revolving Line Maturity Date”
is March 31, 2010. 
 “Streamline Period” is, on and after the Effective Date, the
period (i) beginning immediately after the forty-fifth (45th) consecutive day in which the Borrower has, for each such consecutive day, maintained unrestricted cash at Bank in an amount greater than the aggregate amount of all outstanding Indebtedness, including, without limitation, all Credit
Extensions, of Borrower owed to Bank (the “Streamline Balance”), and (ii) ending on the first day thereafter in which the Borrower does not maintain the Streamline Balance. 
 “Tangible Net Worth” is, on any date, the consolidated total assets of Borrower and its Subsidiaries plus
(a) Subordinated Debt plus (b) outstanding Guaranteed Advances minus (c) any amounts attributable to (i) goodwill, (ii) intangible items including unamortized debt discount and expense, patents, trade and
service marks and names, copyrights and capitalized research and development expenses (except prepaid expenses), (iii) notes, accounts receivable and other

  

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obligations owing to Borrower from its officers or other Affiliates, and (iv) reserves not already deducted from assets, minus (d) Total Liabilities plus (e) any
mark-to-market expense incurred in accordance with GAAP as a result of mark-to-market adjustments of the value of warrants of the Borrower.” 
 and inserting in lieu thereof the following: 
 ““Availability
Amount” is (a) the lesser of (i) the Revolving Line or (ii) the aggregate of (X) the Borrowing Base plus (Y) the Guaranteed Line; minus (b) the amount of all outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit plus an amount equal to the Letter of Credit Reserves); minus (c) the FX Reserve; minus (d) the outstanding principal balance of any Advances (including any amounts used for Cash
Management Services); minus (e) the outstanding principal balance of any Guaranteed Advances. The aggregate amount of all Credit Extensions (other than outstanding principal under the Equipment Line) under this Agreement outstanding at
any time, together with all outstanding Advances (as defined in the EXIM Loan Agreement) under the EXIM Loan Agreement outstanding at any time shall not exceed Thirty Million Dollars ($30,000,000). 
 “Revolving Line” is an Advance or Advances (including, without limitation, Guaranteed Advances and Advances made pursuant
to the EXIM Loan Agreement) in an aggregate amount outstanding at any time under this Agreement and the EXIM Loan Agreement of up to Thirty Million Dollars ($30,000,000). 
 “Revolving Line Maturity Date” is March 31, 2011. 
 “Streamline Period” is, on and after the Effective Date, the period (i) beginning immediately after the forty-fifth (45th) consecutive day in which the Borrower has, for each such consecutive day, maintained unrestricted cash at Bank,
in an amount greater than the aggregate amount of all outstanding Indebtedness, including all Credit Extensions of Borrower owed to Bank, other than any outstanding Guaranteed Advances under the Guaranteed Line that are secured by the Alafi Letter
of Credit (the “Streamline Balance”), and (ii) ending on the first day thereafter in which the Borrower does not maintain the Streamline Balance. Borrower shall be required to maintain the Streamline Balance for forty-five
(45) consecutive days, in Bank’s reasonable business judgment, prior to entering into a subsequent Streamline Period. Borrower shall provide prior-written notice of its intention to enter into a Streamline Period. 
 “Tangible Net Worth” is, on any date, the consolidated total assets of Borrower and its Subsidiaries plus
(a) Subordinated Debt plus (b) outstanding Guaranteed Advances minus (c) any amounts attributable to (i) goodwill, (ii) intangible items including unamortized debt discount and expense, patents, trade and
service marks and names, copyrights and capitalized research and development expenses (except prepaid expenses), (iii) notes, accounts receivable and other obligations owing to Borrower from its officers or other Affiliates, and
(iv) reserves not already deducted from assets, minus (d) Total Liabilities plus (e) up to Four Million Five Hundred Thousand Dollars ($4,500,000) of any mark-to-market expense incurred in accordance with GAAP as a
result of mark-to-market adjustments of the value of warrants of the Borrower.” 
  

	 	5	The Compliance Certificate attached as Exhibit B to the Loan Agreement is hereby deleted and replaced with Exhibit A attached hereto.


 4. FEES. Borrower shall pay to Bank a modification fee equal to Three Hundred Seventy Five Thousand Dollars ($375,000),
which fee shall be due on the date hereof and shall be deemed fully earned as of the date hereof.

  

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Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents. 
 5. CONDITIONS PRECEDENT. Borrower hereby agrees that the following documents shall be delivered to the Bank prior to or concurrently with the First
Loan Modification Effective Date (Domestic), each in form and substance satisfactory to the Bank (collectively, the “Conditions Precedent”): 
  

	 	A.	copies, certified by a duly authorized officer of the Borrower to be true and complete as of the date hereof, of each of (i) the governing documents of the
Borrower as in effect on the date hereof (but only to the extent modified since last delivered to the Bank (ii) the resolutions of the Borrower authorizing the execution and delivery of this Loan Modification Agreement, the other documents
executed in connection herewith and the Borrower’s performance of all of the transactions contemplated hereby, and (iii) an incumbency certificate giving the name and bearing a specimen signature of each individual who shall be so
authorized; 

  

	 	B.	a certificate from the Secretary of State of the applicable State of organization of a recent date as to the Borrower’s existence and good standing;


  

	 	C.	the Export-Import Bank First Loan Modification Agreement, executed by each Borrower, in form and substance acceptable to Bank, in its sole discretion;


  

	 	D.	the Borrower Agreement (as defined in the EXIM Bank Loan and Security Agreement), executed by each Borrower; 

  

	 	E.	an updated Economic Impact Certificate, executed by each Borrower; 

  

	 	F.	an updated Joint Application Form (EXIM), completed and executed by each Borrower; 

  

	 	G.	a certain First Amendment to Promissory Note, executed by each Borrower, in form and substance acceptable to Bank, in its sole discretion; 

  

	 	H.	a duly executed Landlord’s Consent from the landlord of the Borrower’s leased premises located at 7351 Kirkwood Road, Maple Grove, Minnesota 55369, in form
and substance acceptable to Bank, in its sole discretion; 

  

	 	I.	duly executed Bailee’s Waivers from Pilot (Tiger Logistics) and Healthware Europe BV, in form and substance acceptable to Bank, in its sole discretion; and


  

	 	J.	updated property insurance and liability insurance certificates, in form and substance acceptable to Bank, in its sole discretion. 

 6. ADDITIONAL COVENANTS. Borrower is not a party to, nor is bound by, any license or other agreement with respect to which Borrower is the licensee
(a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with
the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available
to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or contract rights to be deemed “Collateral” and for
Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the
license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral
in accordance with Bank’s rights and remedies under the Loan Agreement and the other Loan Documents. In addition, the Borrower hereby certifies that no Collateral is in the possession of any third party bailee (such as at a warehouse). In the
event that Borrower, after the date hereof, intends to store or otherwise deliver the Collateral to such a bailee,

  

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then Borrower shall first receive, the prior written consent of Bank and such bailee must acknowledge in writing that the bailee is holding such Collateral for the benefit of Bank. 
 7. AUTHORIZATION TO FILE. Borrower hereby authorizes Bank to file UCC financing statements without notice to Borrower, with all appropriate
jurisdictions, as Bank deems appropriate, in order to further perfect or protect Bank’s interest in the Collateral, including a notice that any disposition of the Collateral, by either the Borrower or any other Person, shall be deemed to
violate the rights of the Bank under the Code. 
 8. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above. 
 9. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms
all terms and conditions of all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations. 
 10. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and
that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability
thereunder. 
 11. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon
Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in
full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations. Nothing in this Loan
Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. No
maker will be released by virtue of this Loan Modification Agreement. 
 12. RIGHT OF SET-OFF. In consideration of Bank’s agreement
to enter into this Loan Modification Agreement, Borrower hereby reaffirms and hereby grants to Bank, a lien, security interest and right of set off as security for all Obligations to Bank, whether now existing or hereafter arising upon and against
all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control of Silicon Valley Bank (including a Bank subsidiary) or in transit to any of them. At any
time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless
of the adequacy of any other collateral securing the loan. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT
TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. 
 13.
CONFIDENTIALITY. Bank may use confidential information for the development of databases, reporting purposes, and market analysis, so long as such confidential information is aggregated and anonymized prior to distribution unless otherwise
expressly permitted by Borrower. The provisions of the immediately preceding sentence shall survive the termination of the Loan Agreement. 
 14. JURISDICTION/VENUE/TRIAL WAIVER. Borrower accepts for itself and in connection with its properties, unconditionally, the exclusive jurisdiction of any state or federal court of competent jurisdiction in the State of Illinois in
any action, suit, or proceeding of any kind against it which arises out of or by reason of this Loan Modification Agreement. NOTWITHSTANDING THE FOREGOING, THE BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE THE BANK’S RIGHTS AGAINST THE BORROWER OR ITS PROPERTY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW,

  

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BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS LOAN MODIFICATION AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS LOAN MODIFICATION AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. 
 15. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank. 

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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as a
sealed instrument under the laws of the State of Illinois as of the First Loan Modification Effective Date (Domestic). 
  

			
	BORROWER:
	
	STEREOTAXIS, INC.
		
	By	 	 /s/ Daniel J. Johnston

	Title:	 	 Daniel J. Johnston

	Name:	 	 CFO

	
	STEREOTAXIS INTERNATIONAL, INC.
		
	By	 	 /s/ Daniel J. Johnston

	Name:	 	 Daniel J. Johnston

	Title:	 	 CFO

	
	BANK:
	
	SILICON VALLEY BANK
		
	By	 	 /s/ Adam Glick

	Name:	 	 Adam Glick

	Title:	 	 Relationship Manager


 First Loan Modification Effective Date (Domestic): December 15, 2009 







 EXHIBIT B 
 COMPLIANCE CERTIFICATE 
  

					
	 TO:           
	 	 SILICONVALLEY BANK
	 	Date:                     
	 FROM:    
	 	 STEREOTAXIS,INC. and STEREOTAXIS INTERNATIONAL, INC.


 The undersigned authorized officer of StereoTaxis, Inc., a Delaware corporation and StereoTaxis
International, Inc. (collectively, jointly and severally, the “Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”),
(1) Borrower is in complete compliance for the period ending                      with all required covenants except as noted below,
(2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true,
accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if
any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in
accordance with generally GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that
Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in
the Agreement. 
 Please indicate compliance status by circling Yes/No under “Complies” column. 
  

					
	 Reporting Covenant
	  	 Required
	  	 Complies

			
	Monthly financial statements with Compliance Certificate	  	Monthly within 30 days	  	Yes         No
			
	Annual financial statement (CPA Audited) + CC	  	FYE within 120 days	  	Yes         No
			
	10-Q, 10-K and 8-K	  	Within 5 days after filing with SEC	  	Yes         No
			
	 A/R & A/P Agings, Deferred Revenue and Inventory
 Reports
	  	Monthly within 30 days	  	Yes         No
			
	Transaction Reports	  	Weekly, within 5 days*	  	Yes         No
			
	Projections	  	Annually within 30 days prior to FYE	  	Yes         No

  

	*	Monthly during a Streamline Period, within 5 days after the end of each month 

 The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”) 

			
		
	  
	  	

  

									
	 Financial Covenant
	  	 Required
	  	 Actual
	  	 Complies

	 Maintain as indicated:
	  			  			  	
	 Minimum Tangible Net Worth** (tested monthly)
	  	$	            	  	$	            	  	Yes         No

  

	**	See Section 6.9 of the Loan Agreement 

  

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 The following financial covenant analyses and information set forth in Schedule 1 attached
hereto are true and accurate as of the date of this Certificate. 
 The following are the exceptions with respect to the
certification above: (If no exceptions exist, state “No exceptions to note.”) 
  
  
  
  
  
  
  

									
	STEREOTAXIS, INC.	 		 	BANK USE ONLY
	STEREOTAXIS INTERNATIONAL, INC.	 		 		 	
		 		 		 	Received by:	 	  

	By:	 	  
	 		 		 	AUTHORIZED SIGNER
	Name:	 	  
	 		 	Date:	 	  

	Title:	 	  
	 		 		 	
					
		 		 		 	Verified:	 	  

		 		 		 		 	AUTHORIZED SIGNER
					
		 		 		 	Date:	 	  

					
		 		 		 	Compliance Status:	 	Yes         No

  

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 Schedule 1 to Compliance Certificate 
 Financial Covenants of Borrower 
 Dated:                      
 I. Tangible Net Worth (Section 6.9(a)) 
 Required: Borrower shall maintain a minimum
Tangible Net Worth of no less than (i) $1.00 for the monthly periods ending February 28, 2009 and March 31, 2009; (ii) ($3,000,000) for the monthly periods ending April 30, 2009, May 31, 2009 and June 30,
2009; (iii) ($8,000,000) for the monthly periods ending July 31, 2009 and August 31, 2009; (iv) ($6,500,000) for the monthly period ending September 30, 2009; (v) $3,903,001 for the monthly periods ending
October 31, 2009 through and including August 31, 2010; (vi) $1,903,000 for the monthly periods ending September 30, 2010 through and including the monthly period ending November 30, 2010; and (vii) ($97,000) for the
monthly period ending December 31, 2010 and each monthly period thereafter provided further, than in the event that Guaranteed Advances are no longer available under the Guaranteed Line, the foregoing covenant levels shall be
adjusted by Bank, in its good faith business judgment. Such Tangible Net Worth requirements set forth above shall be increased by fifty percent (50%) of the net proceeds from issuances of equity securities of the Borrower and/or Subordinated
Debt issued after the First Loan Modification Effective Date (Domestic). 
 Actual: 
  

						
	 A.
	  	Consolidated total assets of Borrower and its Subsidiaries	  	$	            
			
	 B.
	  	Subordinated Debt	  	$	            
			
	 C.
	  	Outstanding Guaranteed Advances	  	$	            
			
	 D.
	  	Adjusted Assets [line A plus line B plus line C]	  	$	            
			
	 E.
	  	Amounts attributable to Goodwill	  	$	            
			
	 F.
	  	Intangible items including unamortized debt discount and expense, patents, trade and service marks and names, copyrights and capitalized research and development expenses (except
prepaid expenses)	  	$	            
			
	 G.
	  	Notes, accounts receivable and other obligations owing to Borrower from its officers or other Affiliates	  	$	            
			
	 H.
	  	Reserves not already deducted from assets	  	$	            
			
	 I.
	  	Intangible assets [line E plus line F plus line G plus line H]	  	$	            
			
	 J.
	  	Total Liabilities	  	$	            
			
	 K.
	  	Up to $4,500,000 mark-to-market expense incurred in accordance with GAAP as a result of mark-to-market adjustments of the value of Warrants of the Borrower	  	$	            
			
	 L.
	  	TANGIBLE NET WORTH [line D minus line I minus line J plus line K]	  	$	            

 Is line L equal to or greater than (less than)
$            ? 
               No, not in compliance
                                         
                                       
              Yes, in compliance 
  

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